September 17, 2008 ( — Affiliate marketing budgets have been slashed by four per cent in the past year, due to the economic slowdown, a new report shows.

While 46 per cent of merchants find affiliate marketing a very cost-effective channel for driving customer acquisition, up from 44 per cent last year, budgets for the channel have dropped from 18 per cent to 14 per cent in the last year.

However The Affiliate Marketing Survey Report 2008, conducted by online research publisher E-consultancy and affiliate marketing agency R.O.EYE, also showed nearly 60 per cent surveyed acknowledged that affiliate relationships are crucial to a successful programme.

The report shows 47 per cent of merchants cite lack of internal resource as their biggest barrier to successful affiliate marketing, while of 29 per cent claim restricted budgets is there biggest challenge and 28 per cent cite difficulty in attracting affiliates, as their biggest barrier.

R.O.EYE managing director Mark Kuhillow says: "With budgets being reduced as a result of the economic situation, this has had a direct effect on the traffic and sales merchants and agencies have received through the channel. While more merchants than in 2007 view affiliate marketing as a very effective channel, almost 70 per cent are spending less than two hours per week communicating with their affiliates and policing them. It is more important than ever before to forge strong relationships between merchants and their affiliates to protect volume and the channel’s efficiency."


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